The South Korean Government Is Strengthening Anti-Money Laundering Efforts Following a Surge in Cross-Border Crimes in Cambodia and Other Countries

Amid a surge in cross-border crimes targeting South Koreans, including scams in Cambodia, the South Korea Financial Intelligence Unit (FIU) has emphasized the need for the entire financial sector to strengthen anti-money laundering management related to cross-border crimes.

The South Korea Financial Intelligence Unit (FIU) announced on Monday that it held an Anti-Money Laundering (AML) Related Organizations Council” with 16 related organizations. The meeting was held to establish a thorough response system to money laundering related to cross-border crimes targeting South Koreans with overseas bases.

Through the meeting, the South Korean financial sector agreed to strengthen reporting of suspicious cross-border crime transactions. The FIU will collaborate with financial institutions to analyze suspicious cross-border crime transaction types, and financial institutions will collectively report these suspicious transactions. The FIU will conduct strategic analysis of these reported suspicious transactions, which will then be used by law enforcement agencies, including the prosecution and police, to identify and arrest criminal organizations. Furthermore, the FIU plans to continue to promote comprehensive reporting of suspicious transactions by major suspicious transaction types.

Internal anti-money laundering controls within financial institutions will also be strengthened. The Financial Supervisory Service (FSS) conducted a preliminary review of the AML management and supervision of overseas branches and subsidiaries of banks. It found that some banks were relying solely on paper inspections of their Southeast Asian branches and subsidiaries, revealing deficiencies in internal controls.

The FIU has strengthened customer due diligence for customers suspected of cross-border crime and prioritized on-site inspections of branches and subsidiaries in Southeast Asia. Future anti-money laundering inspections will thoroughly examine the management practices of overseas branches and subsidiaries of financial institutions.

Furthermore, the FIU will strengthen cooperative systems, including sharing financial transaction information with overseas FIUs, and continue to pursue related institutional improvements to address cross-border crime.

FSS Governor Lee Hyung-joo stated, This meeting is the first step toward addressing cross-border crime. The FIU will continue to strengthen its response to potential cross-border crimes, not limited to the Cambodian incident.